Increasing Drug Importation To Lower Prices for American Patients
Signed: July 24, 2020
Published: July 29, 2020
Document Number: 2020-16624
📋Summary
This executive order directs the Department of Health and Human Services to expand access to lower-cost prescription drugs by allowing more safe importation from other countries, with the goal of reducing what American patients pay. It affects patients who buy prescription drugs, as well as federal health regulators and entities involved in importing and distributing medicines. It tells HHS to consider granting waivers that let individuals import certain prescription drugs when it is safe and lowers costs, to allow re-importation of insulin in emergency medical situations, and to finish rules that would permit importation of certain drugs from Canada. All actions must follow existing law, depend on available funding, and do not create a new legal right for individuals to enforce in court.
💼Business Impact
This order most directly affects **pharmaceutical manufacturers (brand and biologics), wholesalers/distributors, pharmacies (including mail-order), PBMs/health plans, and Canadian supply-chain partners**, with a particularly acute impact on **high-cost, high-volume chronic drugs** (and **insulin** if emergency re-importation is authorized). It creates opportunities for **state programs, wholesalers, and pharmacy networks** to participate in **FDA/HHS-approved importation pathways** (e.g., Canada-focused programs under FDCA §804) that could lower acquisition costs, but it also raises compliance needs around **FDA authorization, supply-chain security, labeling/track-and-trace, product authenticity, and documentation proving no added safety risk and patient savings**. Immediate actions: businesses should **monitor HHS/FDA rulemaking and waiver/grant processes**, assess which products in their portfolio or formulary could be eligible for importation, and **prepare operational controls** (vendor qualification, serialization/DSCSA alignment, QA testing, adverse-event reporting, and contracting terms) to participate quickly—or to mitigate margin pressure if competitors access lower-cost imports. Manufacturers should also **model pricing and channel impacts** (including potential Canadian supply constraints and contract renegotiations)
Full Text
Executive Order 13938 of July 24, 2020
Increasing Drug Importation To Lower Prices for American Patients
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1 . Purpose. Americans spend more per capita on pharmaceutical drugs than residents of any other developed country. Americans often pay more for the exact same drugs, even when they are produced and shipped from the exact same facilities.
One way to minimize international disparities in price is to increase the trade of prescription drugs between nations with lower prices and those with persistently higher ones. Over time, reducing trade barriers and increasing the exchange of drugs will likely result in lower prices for the country that is paying more for drugs. For example, in the European Union, a market characterized by price controls and significant barriers to entry, the parallel trade of drugs has existed for decades and has been estimated to reduce the price of certain drugs by up to 20 percent. Accordingly, my Administration supports the goal of safe importation of prescription drugs.
Sec. 2 . Permitting the Importation of Safe Prescription Drugs from Other Countries. The Secretary of Health and Human Services shall, as appropriate and consistent with applicable law, take action to expand safe access to lower-cost imported prescription drugs by:
(a) facilitating grants to individuals of waivers of the prohibition of importation of prescription drugs, provided such importation poses no additional risk to public safety and results in lower costs to American patients, pursuant to section 804(j)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 384(j)(2);
(b) authorizing the re-importation of insulin products upon a finding by the Secretary that it is required for emergency medical care pursuant to section 801(d) of the FDCA, 21 U.S.C. 381(d); and
(c) completing the rulemaking process regarding the proposed rule to implement section 804(b) through (h) of the FDCA, 21 U.S.C. 384(b) through (h), to allow importation of certain prescription drugs from Canada.
Sec. 3 . General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
( printed page 45758)(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
July 24, 2020.